Brick and Mortar Companies Venture into Online Shopping


china online shopping

Department stores throughout China are starting to feel the burn of e-commerce. It was three years ago that Dalian Wanda Group Corp chairman Wang Jianlin made a bet with Jack Ma, the founder of the Alibaba Group, stating e-commerce would never outperform department stores. It seems that Jianlin will be eating his words, as online sales have started to increase over the past two years. Luckily for Jianlin, the bet of $16 million has been withdrawn from the table.

According to sales, e-commerce sales have outperformed brick and mortar stores by around 10% this past year. And it is estimated that this percentage will increase as online shopping quickly becomes the method for people to utilize to order the products they wish to own.

The China National Commercial Information Center has stated brick and mortar businesses are going to continue to see shrinkage throughout 2015. In January and February, these brick and mortar companies had already seen sales that were decreased by 1% during this short time frame.

So how are brick and mortar stores competing with online shopping?

More of these brick and mortar stores are choosing to partner with e-commerce shopping platforms

Many stores throughout the world are becoming a part of the Alibaba team, finding their e-commerce division getting more sales than their brick and mortar stores. Many customers are excited about having their favorite shops online, making it easier to get the products they may want or need. For companies who utilize this options, they see greater profit margins, as they are able to advertise and get more consumers to shop their stores.

Though brick and mortar stores still have their benefits, for stores who are serious about staying at the top of the market, they need to expand their offerings to online as well. A study by Accenture in 2014, found that of the customers in China, 75% of these customers look at both online and brick and mortar businesses for prices before making a big purchase. For brick and mortar companies, this has been a hard aspect to deal with when competing with Chinese brands as well as other goods from overseas. This is why several companies have started their own online platform as well.

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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